Where states and markets meet: the financialisation of sovereign debt management

Central banking and the infrastructural power of finance: the case of ECB support for repo and securitization markets

“…The purpose of this article is to open up a new theoretical perspective on financial sector power at a time when market-based economic governance and infrastructural entanglement are undergoing rapid diffusion, both across the globe and into new policy areas. A growing literature is documenting this trend in the area of fiscal policy, where treasuries have embraced increasingly market-based sovereign debt management practices (Lagna, 2016;Livne and Yonay, 2016;Fastenrath et al, 2017). In the area of central banking, the ECB continues to be an innovator.…”

Central banking, shadow banking, and infrastructural power

“…Finally, infrastructural entanglement and power are not limited to monetary policy, but are increasingly important features of financial systems around the world. At the national level, the marketization of sovereign debt management practices has certainly increased infrastructural entanglement between treasuries and capital markets (Dutta, 2018b, Fastenrath, Schwan and Trampusch, 2017, Lagna, 2016, Lemoine, 2016. At the European level, the European Commission's Capital Markets Union is best understood as an experiment in "governing through financial markets" (Braun, Gabor and Hübner, 2018).…”

How Financialization Undermines Democracy

“…As pointed out by Streeck (), financial investors, or the ‘market people’ to use his terminology, have gained substantial political influence as debt financing of government spending has risen across OECD countries over the past three decades. This trend has been further entrenched in Germany and across the eurozone with the emergence of so‐called debt management offices, emulating private sector financial practices (including financial innovation, accounting techniques and even pay levels) to actively promote their national government bonds, while aiming at reducing debt servicing costs (Fastenrath et al., ; Preunkert, ; Trampusch, ). These developments characterize the financialization of sovereign debt.…”